Key Takeaways
- Trump's Strategic Bitcoin Reserve removes the last major threat to Bitcoin, says Bitwise CIO.
- The reserve will hold around 103,500 BTC sourced from government-seized assets.
- Bitwise client allocations to Bitcoin have risen from 1% to 3% in two years.
Bitwise Chief Investment Officer Matt Hougan believes President Trump’s Strategic Bitcoin Reserve has erased the last major risk facing Bitcoin.
In a note to clients Tuesday, Hougan called this “the best time in history to purchase bitcoin” when measured on a risk-adjusted basis.
Reflection on Bitcoin’s early days
Reflecting on Bitcoin’s early days, Hougan said the asset once resembled a lottery ticket — high upside with severe risks.
He cited early concerns including unreliable platforms, weak regulation, and limited custody solutions.
Over the years, institutional involvement from firms like Fidelity and regulatory clarity from spot Bitcoin ETFs reduced many of these concerns.
Government intervention as a lingering threat
However, Hougan identified government intervention as the final lingering threat.
Drawing comparisons to the U.S. gold confiscation of 1933, he questioned for years whether Bitcoin could survive if it ever posed a challenge to the U.S. dollar.
Establishment of the Strategic Bitcoin Reserve
That changed on March 6, when Trump signed an executive order establishing a Strategic Bitcoin Reserve.
The reserve will launch with around 103,500 BTC — sourced from approximately 200,000 BTC forfeited in legal cases — with nearly 95,000 BTC expected to be returned to Bitfinex.
The Treasury and Commerce Secretaries were also tasked with developing budget-neutral plans for further Bitcoin acquisition.
Conclusion on Bitcoin’s future
Hougan wrote:
Just like that, the last existential risk disappeared. Of course, the U.S. would embrace bitcoin. It’s the best backup plan on the market.
Hougan also noted that average client allocations at Bitwise have grown from 1% to around 3% in two years and could rise further as confidence builds.
